Amazon Gets Anti-Social With Zynga

E-commerce giant launches its first social game

There seems to be no end to the ambitions of Amazon (NASDAQ:AMZN). Once an online bookstore, it turned to general retail. Once an e-tailing titan, it turned to tablets.

And now, it has turned to gaming.

Amazon on Tuesday announced the launch of its first social game: Living Classics. It allows users to explore worlds like Alice in Wonderland and The Wizard of Oz.

The game is the mastermind of the newly assembled Amazon Game Studios, which plans to release more titles. The company also launched GameCircle, which is a destination for gamers to meet up.

No doubt, this announcement is a clear shot across the bow at social gamemaker Zynga (NASDAQ:ZNGA). According to BusinessInsider, Amazon already was poaching employees from the game giant (likely an easier task as Zynga’s stock price has plunged.)

Amazon is a serious threat. The company has a massive distribution network and can leverage its Kindle franchise. Plus, Amazon already is known as a low-cost provider, and it could put pressure on the margins for the social gaming industry.

Investors don’t seem to be immediately worried about the news, as ZNGA’s stock actually is up 4% today. But considering the 80% haircut the stock has taken in the past few months, that positivity likely is just bottom-fishers looking for a trade.

Based in Silicon Valley, Tom Taulli is in the heart of IPO land. On a regular basis, he talks with many of the top tech CEOs and founders trying to find the next hot deals and finding out which start-ups are stinkers.

A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.

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